QUESTION 1 00 points On January 1, 2017, Sidebar Incorporation began operations.

Question

QUESTION 1 00 points On January 1, 2017, Sidebar Incorporation began operations. The company authorized 100,000 shares of $4 par value common stock. The company's transactions are as follow January 1: Issued 30,000 shares of common stock, $200,000. January 2: Paid fees associated with obtaining the charter and starting up and organizing the corporation, $24,000. February 10: Issued 13,000 shares of common stock, $130,000. February 15: Purchased 5,000 shares of common stock, $50,000 March 31: The board of directors declared a $0.20 per share cash dividend to be paid on June 15 to shareholders of record on June 10. 1. Prepare the journal entries to record the transactions above. (50 points) 2. Prepare the stockholders' equity section of Sidebar's balance sheet on March 31, 2017. Net income ear (50 points) ed during the quarter was $30,000.

Explanation / Answer

Journal entries: Date Accounts title and explanations Debit $ Credit $ 1-Jan Cash account 200000     Common Stock Capital 120000     Additional paid in capital 80000 2-Jan Pre-organisation expense Dr. 24000      Cash account 24000 10-Feb Cash account 130000     Common Stock Capital 52000     Additional paid in capital 78000 15-Feb Treasury Stockk Dr. 50000    Cash account 50000 31-Mar Dividend Dr. (43000-5000)*0.20 7600      Dividend payable 7600 Retained earnings Dr. 7600     Dividend account 7600 STOCKHOLDER'S EQUITY: 43000 Common shares @4 par value 172000 Additional paid in capital (80000+78000) 158000 Total contributed capital 330000 Less: Ttreasury stock 50000 Paid in capital 280000 Retained earnings (30000-7600) 22400 Stockholder's equity 302400

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